The Federal Trade Commission, along with other law enforcement agencies announced that they will be joining forces to make a coordinated strike against abusive and deceptive debt collection agencies. This crackdown, which will run nationwide, includes 30 new acts of law enforcement from local, state and federal authorities and is focused on debt collectors that use illegal tactics, like making harassing phone calls, or threats of legal action against consumers. The cases that have been announced to the public so far add up to a total of 115 actions taken by over 70 law enforcement bodies that have joined together under the banner of the ‘Operation Collection Protection Initiative.’

Operation Collection Protection Initiative is the largest assembly of law enforcement actions against deceptive/abusive debt collection agencies to date. Some of the actions taken allege that certain collectors have – with knowledge – tried to collect on what are referred to as “phantom debts.” These are false debts that people do not actually have any responsibility to pay on. The illegal practices that authorities have so far focused on include collectors failing to provide legally required notices and disclosures or to follow local and state debt collection licensing regulations and requirements.

According to FTC Chairperson Edit Ramirez, “Being in debt is stressful enough for many Americans without also being subjected to intimidation and false threat. Debtors have certain rights and rogue collectors that step outside the law will face the consequences of illegal behavior.”

When asked about this topic, the Attorney General of Illinois Lisa Madigan said, “My office receives thousands of calls and complaints each year from consumers who are victims of illegal debt collection tactics. Through our partnership with the FTC and states across the country, we are putting scam operations out of business and protecting consumers from abusive practices by legitimate creditors.”

Speaking further on this initiative, Mike Rothman, the Commerce Commissioner in Minnesota said, “Illegal and abusive tactics by debt collectors are a nationwide problem that requires a nationwide response. By working together in this new federal-state collaboration, we are joining our forces to stop these abusive practices and protect the public.”

The FTC revealed five new law enforcement actions against debt collections companies that are engaged in potentially illegal practices as part of this initiative. The FTC has requested that the federal courts take action to stop three illegal debt collection companies. One complaint has been filed under seal, which means that the agency cannot reveal any of the pertinent details about that particular case. Two of the other operations have recently agreed to settle the charges filed against them, including the following:

BAM Financial – The FTC says that these defendants took payments from people via lies, intimidation tactics and other illegal means. According to the complaint from the FTC, the defendants (BAM Financial) purchased debts and made collections by threatening consumers with arrest, wage garnishments and other legal actions, and by pretending to be process servers or lawyers. These defendants also allegedly disclosed debts and/or harassed third party victims and failed to provide identification for themselves as debt collections. They also failed to let consumers know about their legal rights to get verification of any supposed debts.

With so many law enforcement agencies joining forces as a part of this initiative, there will likely be more official announcements about legal actions taken in the near future. Any collectors who are still using shady tactics had better be ready to either change their ways or pay the consequences, as it does not look like Operation Collection Protection Initiative is going to stop taking action any time soon.

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